Churchill Downs Wins...Racing Loses!

The state Senate passed a bill Tuesday to legalize historical horse racing machines, the gambling devices that closely resemble casino slots and have served as a major source of revenue for Kentucky's horse industry over the past decade.

Senate Bill 120, which changes the definition of pari-mutuel wagering in state statute to include these HHR machines, passed the chamber by a 22-15 vote and now moves on to the House.

The horse racing industry championed the legislation after the Kentucky Supreme Court ruled last year that such machines do not constitute legal pari-mutuel racing, arguing the closure of tracks' HHR facilities would devastate the industry and lead to massive job losses.

Critics of the legislation counter that SB 120 is unconstitutional and that the HHR machines could only be legalized through a constitutional amendment, which requires a statewide referendum and could only go into effect by late 2022 at the earliest.

Sen. John Schickel, R-Union, the lead sponsor of SB 120, said the legislation will "support real jobs that support real families," fearing that without HHR, Turfway Park in Northern Kentucky may close and put its 1,400 employees out of work.

In addition to calling the bill unconstitutional, Sen. Whitney Westerfield, R-Crofton, said state government should not "get in bed with an industry that requires its people to lose for the industry to succeed," saying gambling "in all its forms is predatory and bad public policy."

"We're being asked to step in and rescue an industry from its own blunder," Westerfield said, calling the bill a "bailout" for an industry exploiting the poor.

The issue evenly split the Republican caucus, which holds a dominant 30-8 supermajority in the chamber, with more than a dozen of its members rising to speak for or against the bill. Fifteen Republicans voted for and against the bill, while all seven Democrats present voted "yes."

Senate Majority Floor Leader Damon Thayer, R-Georgetown, decried the "class warfare" in Westerfield's speech and said employees of the industry had their work "besmirched."

Thayer, who has aggressively battled SB 120 opponents in committee meetings, said if the legislation is not passed he believes "three to four racetracks could close very soon, in this fiscal year. What about all the taxes that they pay?"

Sen. Stephen Meredith, R-Leitchfield, who voted against SB 120, said he felt legislators were being "blackmailed" with the threat of lost jobs if the bill failed, saying: "We need jobs in Kentucky, but at what price?"

"This is a regressive tax on poor people," Meredith said. "I'm sorry, you have to admit it is."

Schickel countered Meredith by asking: "Is it really our role to tell poor people that we need to protect them from themselves?"

Claiming thousands of coal workers in his district were put out of work by federal government regulations, Sen. Phillip Wheeler, R-Pikeville, explained he was voting for SB 120 because "no Kentuckian ought to be put out of work because of the government."

Gov. Andy Beshear said in his press conference Tuesday he was pleased to see SB 120 pass the Senate and "would sign that bill if it makes it to me,” adding that HHR wagering brings in $15 million a year in revenue to the state and provides jobs.

Horse industry advocacy group Kentucky Equine Education Project applauded the Senate's passage of the bill to "protect important jobs and investment in communities across the commonwealth," calling on the House to follow suit.

“The future of the horse industry and Kentucky’s economy is in legislators’ hands, and real jobs and livelihoods are at risk," the group stated. "A vote to keep historical horse racing in Kentucky is a vote for Kentucky families and the industry that supports them.”

While there are likely enough votes for SB 120 to pass on the House floor, the bill's fate will come down to its support among the House Republican caucus, as a bill usually must have the backing of a majority of its members to get such a vote.

Noting the evenly split Republican Senate caucus vote Tuesday, the Family Foundation of Kentucky — long opponents of expanded gambling and successful litigants against HHR — suggested SB 120 "is now limping toward the House."

"The fact that a bill, co-sponsored by the Senate President, didn't have a more overwhelming level of support in the majority party doesn't bode well for this bill in the House where it won't have that advantage," Family Foundation spokesman Martin Cothran said in a statement. "The number of red-county, conservative Republicans who are proud constitutionalists could mean that SB 120 is in trouble in the House."

Cothran's statement noted a bill to legalize sports wagering in last year's session died in the House after it couldn't gain majority support among House Republicans, adding that "we could see the same thing happen on this bill."

House Speaker David Osborne, R-Prospect, said after SB 120's passage the legislation would receive a hearing in a House committee early Wednesday morning, as "we think it deserved attention."

Osborne said House Republican members are "having ongoing conversations" about SB 120 within the closed doors of their caucus room, but declined to say if it had majority support.

Citing: Joe Sonka at [email protected] and follow him on Twitter at @joesonka. 

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